AutoBeta(AutoBeta.net)04/14 Report--

According to the 2019 annual report released by SAIC on the 14th, SAIC's total revenue in 2019 was 843.324 billion yuan, down 6.53 percent from the same period last year, and the net profit belonging to shareholders of listed companies was 25.603 billion yuan, down 28.90 percent from the same period last year. This is the first decline in annual profits since SAIC went public 10 years ago.

As for the reasons for the decline in profits, SAIC said that "the automobile industry is generally not as expected, and the domestic automobile market is affected by the combination of economic growth and industry policy factors."

SAIC's profits fell for the first time, related to weak sales at the joint venture. Sales data show that SAIC's total sales in 2019 fell 11.5% year-on-year by 6.238 million vehicles, while sales at SAIC-Volkswagen, SAIC-GM and SAIC-GM Wuling all declined to varying degrees.

SAIC-Volkswagen is still the top seller in 2019, with cumulative sales falling 3.07 per cent year-on-year to 2.0018 million vehicles. Considering the 8.2 per cent decline in domestic passenger cars, SAIC-Volkswagen sales decline is considered to be a normal level.

SAIC GM and SAIC GM Wuling sales are relatively ugly, there has been a large decline. SAIC GM sales fell 18.78 per cent year-on-year to 1.6001 million vehicles, while SAIC GM Wuling sales fell 19.42 per cent to 1.6547 million vehicles.

SAIC-Volkswagen, SAIC-GM and SAIC-GM Wuling account for more than 80% of SAIC's sales, and the sales of the three joint venture brands have all declined to varying degrees. Then SAIC's total sales, operating income and net profit naturally declined.

Industry insiders said that SAIC-Volkswagen and SAIC-GM are SAIC's largest joint venture brands, and larger brands are more affected by the downturn in the auto market. On the other hand, SAIC GM Wuling is affected by the external environment difficulties and consumption upgrading of the small and micro entity industry, which has led to a larger market contraction.

In terms of independent brands, SAIC passenger car sales, mainly Roewe brand and Mingjue brand, fell 4.08 per cent to 673200 vehicles compared with the same period last year. SAIC Chase is the only brand to achieve sales growth, with sales up 21.36 per cent to 153000 vehicles in 2019.

It is understood that SAIC set a sales target of 7.1 million vehicles in 2019 and then lowered it to 6.5 million vehicles, but it still failed to meet its sales target by December last year. SAIC said that "the company's vehicle sales this year decreased compared with the same period last year, at the same time, the switching between the five and six models aggravated the contradiction between supply and demand, domestic new energy vehicles subsidies slope and other factors, the net profit belonging to shareholders of listed companies decreased compared with the same period last year."

SAIC has set a sales target of 6 million vehicles in 2020, down 7.69% from last year's sales target, but the sudden COVID-19 epidemic makes this goal full of great challenges. According to sales figures released by SAIC, SAIC sold a total of 679000 new cars in the first quarter of this year, down 55.71 per cent from a year earlier. Of these, sales fell 34.55 per cent year-on-year to 400000 vehicles in January, 85.95 per cent to 47000 vehicles in February and 58.6 per cent to 231000 vehicles in March.

The decline in sales has brought tremendous operating pressure on SAIC. Since March, many SAIC companies have begun to adopt wage reduction strategies to reduce operating costs.

On the whole, SAIC's sales volume, operating income and net profit declined to varying degrees last year due to the recession of the car market, economic macro-control and policy adjustment, and the three joint venture brands fell into a state of weak sales. Independent brands have not yet formed a trend of being on their own, resulting in SAIC's sales loss of one million last year.

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